Terminology

Estimating the budget amount for individual periods,
budget items, and activities, and rolling-up the individual estimates
to calculate a project total.

Spreading

The allocation or distribution of budget amounts
to project activities across time periods for budgetary or project
performance measurement.

Budget Adjustment

The undistributed budget amount, or the amount of
the budget that has not been distributed to periods.

Costing Activity

An activity to which budget amounts are assigned.
These are activities at the activity costing level.

Distributed Budget

Represents budget amounts that have been distributed
to periods. After you distribute a budget adjustment to periods, the
system updates the distributed budget with that amount and changes
the budget adjustment amount to zero.

Estimating

Developing an approximation of the costs of resources
needed to complete project activities. Resources can include labor,
equipment, material, and so on. Estimates do not involve allocating
or distributing costs across time periods for budgetary or project
performance measurement.

Project Charging Level and Activity Costing Level

The project charging level is the level in the work
breakdown structure (WBS) at which project budgets are maintained.
If you use PeopleSoft Program Management, you can select a project
charging level of either the detail activity level, or an activity
costing level that is a higher WBS level than detail activities. If
you use PeopleSoft Project Costing without PeopleSoft Program Management,
the project charging level is always the detail activity level.

Target Budget

The sum of a budget adjustment and the distributed
budget. The budget adjustment can be added to or subtracted from
the distributed budget to calculate the target budget.

Top-down Estimating

Typically uses the actual cost of a previous, similar
project, or a lump sum of money that is available for a project, as
the basis for estimating the cost and revenue of the current project
and applying it to down to the activity, budget item, and period level.

Project Budgeting Setup Steps

This table lists the high level steps to enable
and set up project budgeting and provides a link to the documentation
that discusses the step:

Setup Step

Documentation

Establish budget period calendars. Optionally establish
summary budget period calendars to use budget period roll-up functionality.

If you use PeopleSoft Program Management, at the
Project Costing installation level enable users to choose the general
ledger (GL) business unit and department distribution when creating
budget detail rows by using the Get Plan feature.

You can simplify the process of creating budgets
by using project templates. For example, you can create a project
template that contains the detailed work breakdown structure, budget
plan, and budget items that are associated with the project activities.
Use the template to populate new projects with the preset budget information.
You can modify the project template, or create multiple templates
to meet your business needs.

Top-down Budget Distribution

The main steps to create budgets from the top down
are:

Enter a high-level estimate for
the project on the Budget Plan page.

Use this
page to enter budget scenarios for the project. Budget plans provides
a high level definition of the total budget for each project budget
under consideration.

(Optional) Distribute the estimate
down to summary activities on the Budget Detail page.

Distribute the estimate down
the WBS to costing activities on the Budget Detail page.

Use this page to define a specified project budget
at a greater level of detail by using budget items.

Return to this page to distribute the budget item
budget adjustment across budget periods.

Choose one cost and one revenue
budget plan and finalize the plans.

Finalizing
a budget plan sends the budget data to the Project Transaction Interface
staging table (INTFC_PROJ_RES) and initiates a process to determine
if the budget transactions go directly to the Project Transaction
table (PROJ_RESOURCE). If Commitment Control is active for Project
Costing and the GL business unit and ledger group combination, the
rows must first go through Commitment Control.

You can finalize only active plans.

You distribute project-level cost estimates across
the WBS for detail activities, budget items, and time periods by using
one of the distribution options listed in this table:

Distribution Option

Description

Percentage spread

Enter adjustments at the project or summary activity
level and spread the adjustment based on the percentages entered for
each child costing activity under that project or summary activity.
Percentages entered must equal 100 percent.

Even spread

Enter adjustments at the project or summary activity
level and spread the adjustment evenly to each child costing activity
under that project or summary activity.

Adjust by amount

Enter adjustments at the project or summary activity
level and spread the adjustment manually to each child costing activity
under that project or summary activity by amount, or adjust particular
activities directly.

You can enter negative percentages and amounts for
activities, budget items, and periods.

Bottom-up Project Budgeting

After you create a detailed WBS and budget plan
in Project Costing, you can create budget details by estimating amounts
by period for budget items and rolling up the amounts to the activity
and project levels.

For example, you can enter revised period budget
amounts at the budget item level, which roll up to the activity level.
If the sum of the revised budget item amounts is different than the
previous activity budget amount, you can override the previous activity
budget amount. The sum of the revised activity budget amounts rolls
up automatically to the project level.

Calculate Budget Amount Based on Employee, Job
Code, or Project Role

You have the option to calculate period budget amounts
by selecting a rate by employee, job code, or project role. You can
enter a quantity, unit of measure, and rate calculation basis for
a period, and the system calculates the period budget amounts that
roll up to the budget item, activity, and project level.

The Calculate Amount From Quantity feature performs
in a similar manner as a worksheet. For example, assume that you want
to calculate the budget amount for 100 hours of labor by using predefined
rates. First you want to view the calculations based on employee,
job code, and project role rates, after which you will determine which
rate to use. These are the typical steps to accomplish this scenario:

The system clears the previous calculated amount
and displays the new results. Repeat this process as many times as
needed for each period row.

When you reach the desired the
budget adjustments, click Distribute Budget to update the distributed budget and target budget amounts.

Distribute Costs to Budgets Process in Program
Management

If you use PeopleSoft Program Management, you can
generate a bottom-up project cost and revenue budget from the amounts
defined on the Resources by Activity page. You can click the Get Plan button on the Budget Plan page
to trigger the Distribute Costs to Budgets Application Engine process
(PGM_SPREAD). This process creates budget detail rows based on activity
resource amounts. If the budget plan has a cost budget type, the cost
amounts from the Resources by Activity page are used for the detail
budget rows. If the budget plan has a revenue budget type, the bill
amounts from the Resources by Activity page are used for the detail
budget rows.

Project Charging Levels

If you use PeopleSoft Program Management, you can
take advantage of a flexible project activity model that supports
both a detail WBS for planning, and a cost breakdown structure for
accounting. You can use different levels of the WBS for project management
and accounting by defining the WBS level at which you want to track
project budgets and costs. You can specify a project charging level
of WBS level 1, level 2, or level 3, and the system restricts charges
to summary and detail activities that are in the specified level.
You can also specify a project charging level of all detail activities,
in which case you can capture costs on detail activities, but not
on summary activities—regardless of an activity's WBS level.

If you use PeopleSoft Project Costing without PeopleSoft
Program Management, the project charging level is all detail activities.

Budget Items

Budget items are one of the building blocks of a
project budget. Initially, the system uses budget items to establish
default ChartField values for budget rows. Later, budget items provide
a way of identifying and grouping transactions that the system uses
to identify a project activity's budget costs or revenue for a given
period.

Project budgeting uses the fields defined on the
budget item to match with actual amounts in project transactions.
Only those transactions that match the defined ChartField values are
counted as actuals for a given budget item.

Budget Alerts

You can establish cost budget alerts that warn the
project manager of potential cost overruns at the project or activity
level. The system compares budget amounts with values on the Summary
Budget Data table (PC_BUD_SUMMARY), which stores summarized actual
costs.

Although budget alerts are not processed at the
business unit level, you establish cost budget alerts for the business
unit that appear as default values for all project budgets belonging
to that business unit. Cost budget alerts that you establish at the
project level can be used as default values for project activities.
You can override default settings at the project and activity levels.

Budget alerts appear on the Budgets vs. Actuals
interactive report.

Finalizing Budgets

You can define multiple cost budget plans and revenue
budget plans for a project, and designate one cost budget plan and
one revenue budget plan as active. After you distribute all summary
budget amounts to costing activities, budget items, and periods, you
can finalize the active plans.

Finalizing a budget plan sends the budget data to
the Project Transaction Interface table and initiates the PC_WRAPPER
Application Engine program which calls the Load Third-Party Transactions
Application Engine process (PC_INTFEDIT). The Load Third-Party Transactions
process triggers the Project Costing to Commitment Control Application
Engine process (PC_TO_KK) , which determines if the budget transactions
must go through Commitment Control before they are posted to the Project
Transaction table.

If Commitment Control is not required, the process
sends the rows directly to the Project Transaction table. You can
modify rows on the finalized budget plan and refinalize the plan,
which updates the budget amounts on the Project Transaction table.
You can also inactivate the previous finalized plan, and activate
and finalize a different plan, which replaces the previous budget
transactions with new finalized budget transactions on the Project
Transaction table.

If Commitment Control is required, the Project Costing
to Commitment Control process sends budget rows and cost transactions
that require budget-checking to Commitment Control. With Commitment
Control you cannot finalize another plan of the same budget type (cost
or revenue) and analysis type. You can, however, add new rows on the
Budget Detail page and refinalize the budget plan.

After you finalize a budget you can run a Budgets
to Costs Review by Period report (PCY1050.RPT) to perform budget versus
cost analysis, or use the Budget vs. Actual interactive report to
compare budgeted amounts with actual costs.

Budget Plan Versions

You can retain a historical version of the budget
plan transaction rows each time that you finalize a budget. Historical
budget plan versions are stored in the Project Transaction table along
with the current, finalized budget rows. Each historical budget version
is uniquely distinguished by analysis type, and can be used for analysis
and reporting. You can control budget plan versions by business unit.

By using budget row versioning, the first time that
you finalize a project's budget plan, the system creates a copy of
the plan and assigns a unique analysis type to budget rows in the
plan copy. The new analysis type distinguishes these rows as historical
budget plan version sequence one. The original analysis type remains
unchanged on the current, finalized budget rows.

If you modify and refinalize the existing budget
plan, or activate and finalize a different plan for the project, the
system again creates a copy of the new plan and assigns a unique analysis
type to budget rows in the plan copy. The new analysis type distinguishes
these rows as historical budget plan version sequence two.

You configure the budget version analysis types,
and the sequence in which they are used, by business unit. PeopleSoft
delivers the following sequence of analysis types and analysis groups
that you can use to distinguish historical cost and revenue budget
versions:

Version Sequence

Cost Budget Version Analysis Type

Revenue Budget Version Analysis Type

Version Analysis Group

1

CV1 (Historical Cost Budget Version 1)

RV1 (Historical Revenue Budget Version 1)

HBPV1 (Historical Budget Version 1)

2

CV2 (Historical Cost Budget Version 2)

RV2 (Historical Revenue Budget Version 2)

HBPV2 (Historical Budget Version 2)

3

CV3 (Historical Cost Budget Version 3)

RV3 (Historical Revenue Budget Version 3)

HBPV3 (Historical Budget Version 3)

4

CV4 (Historical Cost Budget Version 4)

RV4 (Historical Revenue Budget Version 4)

HBPV4 (Historical Budget Version 4)

You define these sequences at the business unit
level, and use them at the project level. Each project independently
uses the analysis type sequence for budget plan versions. The last
analysis type used in the sequence is stored in the Project Header
table (PS_PROJECT).

For example, assume that you finalize a new cost
budget plan using the analysis type BUD. The system:

Saves the new refinalized budget
detail rows with analysis type BUD in the Project Transaction table.

Creates a new copy of the refinalized
budget detail rows and updates the analysis type to CV2 (Historical Cost Budget Version 2).

Stores the copy of the budget
detail rows with analysis type CV2 in the Project Transaction table.

The system does not retain a historical budget version
in the Project Transaction table if:

The project is commitment-controlled.

The Enable Budget Row Versioning check box is not activated
for the business unit on the Budget Row Versioning page at the time
you finalize the budget.

No budget analysis type sequence
is defined on this page for the business unit.

All of the analysis types in
the budget analysis type sequence have been assigned to a budget version
for the business unit.

By using budget row versioning you have the ability
to preserve detailed budget rows in the Budgeting tables that match
rows in the Project Transaction table. For example, assume that Budget
Plan A is the active, finalized cost budget plan. The Project Transaction
table contains budget rows with an analysis type of BUD for Budget Plan A, and a copy of Budget
Plan A budget rows with an analysis type of CV1. Now you want to modify the budget plan. Instead
of modifying and refinalizing Budget Plan A, you inactivate Budget
Plan A and activate a new plan—Budget Plan B. When you finalize Budget
Plan B, the system deletes the previous BUD rows for Budget Plan A from the Project Transaction
table, creates new BUD rows
for Budget Plan B, and creates a copy of the new Budget Plan B budget
rows with an analysis type of CV2. Then if you want to view the detail rows in the Project Transaction
table for analysis type CV1, you simply view Budget Plan A that contains
identical rows.